VIETNAM PLASTIC MARKET

Vietnam Plastic Market is projected to witness a strong growth rate of 7.5% during the forecast period primarily driven by extensive use of plastic across various industries, increasing foreign investments, and lower manufacturing expenses in comparison to international competitors.

Major Vietnam Plastic Market Drivers and Emerging Trends

The Vietnamese economy benefits significantly from the versatile use of plastics across multiple sectors including consumer goods, packaging, automotive, electronics, and agriculture. According to Vietnam plastic industry report, the plastic sector in the country generated 8.89 million tons of products in 2019 with its national economic contribution estimated at USD 17.5 billion which makes up 6.7% of GDP. The rapid pace of development in the plastic industry positions it as a dynamic sector within the Vietnamese economy with several factors contribute to the industry’s high growth rate. First, the market demand for plastic products is vast and promising due to their widespread use across different domains which includes packaging materials, construction supplies, and household appliance manufacturing. Secondly, plastic sector in Vietnam is at an early stage of development in comparison to other nations worldwide but it is experiencing rapid growth. 

The plastic industry in Vietnam boasts over 4,000 operational enterprises with private firms making up more than 99 percent. The majority are situated in the southern region, accounting for over 80% of the nation’s plastic businesses. The region also hosts multiple industrial parks specializing in the processing sector, particularly in plastic packaging production. The majority of plastic enterprises in Vietnam are SMEs, with over 90% of them engaged in outsourcing for foreign countries while none of these enterprises have successfully established their own brands.

In general, plastic enterprises in the country struggle with low competitiveness primarily because of the small production sizes and technological limitations. The enterprises rely heavily on Chinese technology with equipment, machinery, and manufacturing lines sourced from China comprising more than 40 percent of their total resources. Recently, there is a trend among plastic companies to invest in modernized technology from Japan and Korea to manufacture engineering plastics, and from Germany for construction plastics.

The primary sources of plastic materials are petroleum, natural gas, and coal processed through plasticization. The country’s plastic industry currently produces only 15 to 35 percent of its raw material needs domestically depending on the product type, while the majority is imported from Japan, China, Korea, and ASEAN nations. The primary factor driving the importation of raw materials into Vietnam’s plastic industry is the high capital investment necessary for manufacturing plastic materials, which includes initial startup capital and ongoing operational funding. Domestic demand for basic plastic materials in Vietnam is expanding at a rate exceeding 10 percent annually, whereas the supply growth remains below 3 percent annually. In recent years, the country has invested in significant petrochemical ventures such as Nghi Son refinery, Binh Son, Phy My chemical and plastic project, among others. Despite these efforts, basic plastic materials currently still account for approximately 18 percent of the local demand.

The other factor supporting the growth of Vietnam plastics market size is the increasing foreign investment in the industry. The plastic industry in the country presents substantial opportunities for foreign investors in comparison to numerous other sectors, highlighted by a significant shift in investment to Vietnam from China in recent years. This shift can be attributed to several factors including lower labor expenses relative to China, recent Chinese regulations that restrict the plastic waste imports which affect its plastic recycling operations, and anti-dumping duties imposed on plastic products from China in markets such as Europe. Additionally, Vietnam has established numerous free trade treaties with significant partners which have expanded opportunities for export and investment, enticing a surge of foreign investors to the country’s plastic industry. In particular, investors from ASEAN nations like Thailand and Indonesia along with those from Japan and Korea have shown interest in investing in and acquiring stakes in Vietnam’s prominent plastic enterprises.

The involvement of foreign investors has profoundly altered the landscape of Vietnam’s market for this industry, as it has injected excitement into the investment market in this sector, drawing capital and modern technology from overseas to upgrade the local plastic industry. In contrast, domestic plastic companies also face tough competition from robust foreign counterparts, resulting in many Vietnamese firms being acquired by foreign entities or exiting the market altogether.

Another challenge for the market includes the inadequate management of plastic waste which leads to significant economic and environmental implications. Asia accounts for over 80% of plastic pollution leaking into marine ecosystem, with eight of the leading contributors are countries from this continent and Vietnam ranks fourth on a global scale. Vietnam has recognized the urgent challenge of plastics pollution and has committed to ambitious national goals for managing plastic waste to address its environmental and economic impacts. However, plastic recycling in the country faces significant challenges such as insufficient ongoing domestic demand for recycled plastic in various resin types and gaps in domestic recycling infrastructure.

Based on the application, packaging holds the largest share in the Vietnam plastic market. Plastics are chosen for their lightweight characteristics and their resistance to chemical, thermal, and corrosion issues which make them a valuable option for packaging purposes. PET is extensively used in packaging especially within the food and beverage sector as its advantages which includes portability and lightweight property, make it a preferred material for packaging purposes.

Based on the product type, PET, PVC, and HDPE will dominate the market share. Future market growth is expected to be driven by the increasing demand for PVC fittings and pipes as well as PP films. Additionally, the plastic industry’s shift toward recycling technologies is addressing environmental impacts.

Segments covered in the Report:

The Vietnam Plastic Market has been segmented on the basis of type and end-use industry. Based on the type, the market is segmented into polyethylene, polypropylene, polyethylene terephthalate, polyvinyl chloride, polyamide, polycarbonate, polyurethane, polystyrene, others. Based on the end-use industry, the market is segmented into packaging, automotive & transportation, infrastructure & construction, consumer goods, healthcare & pharmaceuticals, electrical & electronics, others.

 Market Segmentation

Vietnam Plastic Market by Type

• • Polyethylene
  • Polypropylene
  • Polyethylene Terephthalate
  • Polyvinyl Chloride
  • Polyamide
  • Polycarbonate
  • Polyurethane
  • Polystyrene
  • Others

Vietnam Plastic Market by End-Use Industry 

• • Packaging
  • Automotive & Transportation
  • Infrastructure & Construction
  • Consumer Goods
  • Healthcare & Pharmaceuticals
  • Electrical & Electronics
  • Others